Fixed Mortgage Rates Hit New Low for 2014; 30-Year at 4.21%

Fixed Mortgage Rates Hit New Low for 2014; 30-Year at 4.21%Average fixed mortgage rates moved down further this week, touching a new low for the year.
The new low for the 30-year fixed of 4.21 percent followed a decline in Treasury yields as the economic growth for the first quarter came in well below market expectations.
That’s the lowest level for the 30-year fixed-rate since the week of November 7, 2013.
However, this trend could be temporary.
Just today, long-term bonds tumbled and interest rates spiked as the 30-year Treasury bond auction saw weak demand, according to Bloomberg. The results of the auction came out at 1:01 p.m. Eastern Time, which was when prices plunged.
Ironically, the news of the auction came after Federal Reserve Chair Janet Yellen told the Senate Budget Committee that demand for Treasury securities remains strong. “Interest rates are unlikely to begin rising until we are in a strong economic recovery,” she said.
Freddie Mac releases the weeks average fixed mortgage rates Thursday mornings.
Frank Nothaft, vice president and chief economist, Freddie Mac said the lower mortgage rates were mostly due to the decline in 10-year Treasury yields after a dismal report on real GDP growth in the first quarter.
However, the GDP report was preceded last week by a positive jobs report. The economy added 288,000 jobs in April, the largest since January 2012, and followed an upward revision of 36,000 jobs for the prior two months. The unemployment rate fell to 6.3 percent.
Here is Freddie Mac’s full overview of rates:
30-year fixed-rate mortgage (FRM) averaged 4.21 percent, with an average 0.6 point for the week ending May 8, 2014, down from last week when it averaged 4.29 percent. A year ago at this time, the 30-year FRM averaged 3.42 percent.
15-year FRM this week averaged 3.32 percent, with an average 0.6 point, down from last week when it averaged 3.38 percent. A year ago at this time, the 15-year FRM averaged 2.61 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.05 percent this week, with an average 0.5 point, unchanged from last week. A year ago, the 5-year ARM averaged 2.58 percent.
1-year Treasury-indexed ARM averaged 2.43 percent this week, with an average 0.4 point, down from last week when it averaged 2.45 percent. At this time last year, the 1-year ARM averaged 2.53 percent.

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